Exhibit
4.1


 


CERTIFICATE OF DESIGNATION OF


 


SERIES C SENIOR PREFERRED STOCK


 


OF


 


GEOKINETICS INC.


 


PURSUANT TO SECTION 151(g) OF THE


 


GENERAL CORPORATION LAW OF THE STATE OF DELAWARE


 


Geokinetics Inc. (the “Corporation”),
a corporation organized and existing under the laws of the State of Delaware,
hereby certifies that:


 


The undersigned, Richard F.
Miles, President and Chief Executive Officer of Geokinetics Inc., a Delaware
corporation (the “Corporation”), does hereby state and certify that the
Board of Directors for the Corporation, by duly and properly called and held on
December 2, 2009, duly adopted the following resolution providing for the
issuance of a series of the Corporation’s preferred stock, par value $10.00 per
share (the “Preferred Stock”), and further providing for the
designation, powers, preferences and relative, participating, optional and
other rights, and the qualifications, limitations and restrictions thereof, all
in accordance with the provisions of Section 151(g) of the General
Corporation Law of the State of Delaware:


 


RESOLVED, that pursuant to
the authority expressly granted to and vested in the Board of Directors of the
Corporation by Article FOURTH of the Corporation’s Certificate of
Incorporation (the “Certificate of Incorporation”), a series of
Preferred Stock of the Corporation be, and hereby is, created out of the
authorized but unissued shares of capital stock of the Corporation and
authorized to be issued, such series to be designated Series C Senior
Preferred Stock (the “Series C Preferred Stock”), to consist of
450,000 shares, par value $10.00 per share, of which the powers, preferences
and relative, participating, optional and other rights, and the qualifications,
limitations, and restrictions thereof, shall be, in addition to those set forth
in the Corporation’s Certificate of Incorporation, as follows:


 

















 


(1)           Series C Preferred Stock.


 


(a)           Dividends.             The holders of Series C Preferred
Stock, prior and in preference to any declaration or payment of any dividend on
any class or series of capital stock of this Corporation, shall be entitled to
receive dividends, cumulative and compounded, at the applicable Dividend Rate
(as defined below).  All dividends will
accumulate until paid in cash, whether or not declared, and whether or not
there are any funds legally available for the payment of such dividends.  For purposes of this Section 1(a)(i), “Dividend
Rate” shall mean 12% per annum, compounded quarterly effective as of the
date of issuance of the Series C Preferred Stock, of the Original Issue
Price (defined in Section 1(b)(i) below) for each share of Series C
Preferred Stock.  After October 31,
2011, all dividends shall be paid in cash on each quarterly dividend payment
date. All unpaid dividends on Series C Preferred Stock shall be cumulative
and shall accrue, compounding quarterly, regardless of whether or not the
Corporation shall have funds legally available for the payment of such
dividends.


 


(b)           Liquidation Preference.


 


(i)            The holders of Series C Preferred
Stock, in the event of any Liquidation Event (as defined below), either
voluntary or involuntary, shall be entitled to receive, prior and in preference
to the distribution of any proceeds of such Liquidation Event (the “Proceeds”)
to the holders of Common Stock and other preferred securities (but pari passu to the holders of Series B Preferred Stock),
an amount per share (the “Liquidation Preference Amount”) equal to (A) the
sum of the Original Issue Price (as defined below) for the Series C
Preferred Stock, plus (B) any accrued but unpaid dividends, which have
been accrued to the date of payment. In case the net assets of the Corporation
legally available therefor are insufficient to permit the payment upon all
outstanding shares of Series C Preferred Stock of the full preferential
amount to which the holders of such shares are entitled, then such net assets
shall be distributed ratably upon outstanding shares of Series C Preferred
Stock in proportion to the full preferential amount to which each such share is
entitled. For purposes hereof, “Original Issue Price” shall mean $250.00
per share for each share of Series C Preferred Stock (as adjusted for any
stock splits, stock dividends, combinations, subdivisions, recapitalizations or
the like with respect to the Series C Preferred Stock).


 


(ii)           For purposes of this Section 1(b), a
“Liquidation Event” shall include (A) the sale, transfer or other
disposition of all or substantially all of the Corporation’s assets, (B) the
merger or consolidation of the Corporation with or into another entity (except
a merger or consolidation in which the holders of capital stock of the
Corporation immediately prior to such merger or consolidation continue to hold
at least 50% of the voting power of the capital stock of the Corporation or the
surviving or acquiring entity), (C) the transfer (whether by merger,
consolidation, exchange, reorganization or otherwise), in one transaction or a
series of related transactions, to a person or group of affiliated persons
(other than Avista Capital Partners, L.P. and its affiliates), of the
Corporation’s equity securities if, after such transfer, such person or group
of affiliated persons would hold 50% or more of the outstanding voting stock of
the Corporation (or the surviving or acquiring entity) or (D) a
liquidation, dissolution or winding up of the Corporation; provided, however,
that a transaction shall not constitute a Liquidation Event if its sole purpose
is to change the state of the Corporation’s incorporation or to create a
holding company that will be owned in substantially the same proportions by the
persons who held the 


 


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Corporation’s securities immediately prior to such
transaction. The treatment of any particular transaction or series of related
transactions as a Liquidation Event hereunder may be waived by the vote or
written consent of the holders of a majority of the outstanding Series C
Preferred Stock (voting on an as converted basis).


 


(iii)          In
any Liquidation Event, if Proceeds received by the Corporation or its
stockholders are other than cash, their value will be deemed their fair market
value. The determination of such fair market value shall be made by the Board
of Directors of the Corporation or as otherwise may be set forth in the
definitive agreements governing such Liquidation Event.


 


(c)           Redemption.


 


The Corporation shall redeem
all outstanding shares of Series C Preferred Stock on March 31,
2016.  Each share of Series C
Preferred Stock to be redeemed hereunder shall be redeemed by payment by the
Corporation in cash of the Redemption Price (as defined below). For purposes
hereof, the term “Redemption Price” shall mean, with respect to each
share of Series C Preferred Stock, an amount equal to the Liquidation
Preference Amount.


 


(d)           Approval Rights. 
So long as at least 100,000 shares of Series C Preferred Stock
remain outstanding, the Corporation shall not, without first obtaining the
approval (by vote or written consent, as provided by law) of not less than a
majority of the then-outstanding shares of the Series C Preferred Stock:


 


(A)          Amend the Corporation’s Certificate of
Incorporation or Bylaws in any material respect (other than an amendment to
change the name of the Corporation);


 


(B)           Declare or pay any dividend or other distribution
upon the Corporation’s capital stock (except dividends payable solely in shares
of Common Stock or Series B or Series C Preferred Stock in lieu of
payment of cash dividends), or purchase, redeem, or otherwise acquire any
shares of the Corporation’s capital stock, except for repurchases, at cost, of
shares of the capital stock of the Corporation (pursuant to rights held by the
Corporation as of the Filing Date) held by the Corporation’s consultants,
directors, officers or employees;


 


(C)           Sell, lease, assign, transfer or
otherwise convey or otherwise dispose of all or substantially all of the assets
of the Corporation or any of its subsidiaries, or effect any consolidation,
merger or reorganization involving the Corporation or any of its subsidiaries,
or effect any transaction or series of related transactions in which the
Corporation’s stockholders immediately prior to such transaction or
transactions own immediately after such transaction or transactions less than
50% of the voting securities of the surviving corporation or entity (or its
parent);


 


(D)          Reclassify, reorganize or recapitalize
the Corporation’s outstanding capital stock;


 


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(E)           Create or issue any class or series of
stock or other security of the Corporation on parity with or having preference
over the Series C Preferred Stock or increase the authorized number of
shares of the Series C Preferred Stock;


 


(F)           Effect any transaction with the
management, related parties or other affiliates of the Corporation, or extend
or waive the terms of any such existing transactions, other than (1) issuances
of options, warrants or Common Stock pursuant to an equity incentive plan or
similar arrangement approved by the Board of Directors or (2) any other transaction
with management, related parties or affiliates of the Corporation on terms
approved by a majority of the members of the Board of Directors who are not,
either directly or indirectly, a party to such transaction; and


 


(G)           Increase or decrease the number of
directors on the Board of Directors of the Corporation.


 


(e)           Financial Statements, Reports, etc. 
The Corporation shall furnish to each to each holder of the Series C
Preferred Stock:


 


(i)            within 90 days after the end of each
fiscal year, its consolidated balance sheet and related statements of income,
stockholders’ equity and cash flows showing the financial condition of the Corporation
and its consolidated subsidiaries as of the close of such fiscal year and the
results of its operations and the operations of such persons during such year,
together with comparative figures for the immediately preceding fiscal year,
all in reasonable detail and prepared in accordance with United States
generally accepted accounting principles (“GAAP”), all audited by UHY,
LLP or other independent public accountants of recognized national standing and
accompanied by an opinion of such accountants (which opinion shall be without
any qualification or exception as to the scope of such audit) to the effect
that such consolidated financial statements fairly present the financial
condition and results of operations of the Corporation and its consolidated
subsidiaries on a consolidated basis in accordance with GAAP;


 


(ii)           within 45 days after the end of each
of the first three fiscal quarters of each fiscal year, its consolidated
balance sheet and related statements of income, stockholders’ equity and cash
flows showing the financial condition of the Corporation and its consolidated
subsidiaries as of the close of such fiscal quarter and the results of its
operations and the operations of such persons during such fiscal quarter and
the then elapsed portion of the fiscal year, and comparative figures for the
same periods in the immediately preceding fiscal year, all certified by one of
its chief executive officer, chief financial officer, any vice president,
principal accounting officer, treasurer, assistant treasurer or controller of
such person as fairly presenting in all material respects the financial
condition and results of operations of the Corporation and its consolidated subsidiaries
on a consolidated basis in accordance with GAAP, subject to normal year-end
audit adjustments and the absence of footnotes.


 


[SIGNATURES ON FOLLOWING PAGE]


 


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IN WITNESS WHEREOF,
Geokinetics Inc. has caused this Certificate of Designation to its Certificate
of Incorporation to be signed by Richard F. Miles, its President and Chief
Executive Officer, this 18th day of December, 2009.


 


 


	
   

  	
  GEOKINETICS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard F. Miles

  
	
   

  	
   

  	
  Richard F. Miles,
  President and

  
	
   

  	
   

  	
  Chief Executive Officer

  



 


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